On October, 22, 2020, David Cohen was booked at the Palm Beach County Jail and criminally charged with money laundering, two counts of grand theft of over $100,000, and conducting an organized scheme to defraud $50,000 or more.
Our securities fraud attorneys are representing investors in a variety of cases tied to investments in Marijuana, CBD and THC related companies. This growing area of the economy is rife with fraud and non-registered brokers or financial advisors and company insiders taking investors to new highs only to discover that most of the money has been taken for the insiders own personal use.
Marijuana And Real Estate Investments
Tania Deutsch, who is from Chile and lives in Scranton, Pennsylvania, had been in the area to visit her daughter when she met Cohen at the Blue Martini Lounge in Boca Raton. She told The Palm Beach Post that Cohen told her he was in the cannabis business for humanitarian reasons.
According to an investigative report by the Florida Department of Financial Services and the Palm Beach County Sheriff’s Office, Cohen sold Deutsch on an investment in Mass Alternative Care, a marijuana company based in Massachusetts. She was supposed to receive an 8% return on her investment and her first dividend payment of $192,000 in two years.
On November 1st, 2016, Deutsch wired $1.2 million to the bank account for Cohen’s ECP Capital Partners. The investigative report said the company’s bank account balance was roughly $1,400 at the time of the transfer. The next day, Cohen transferred $600,000 to his personal checking account. Cohen continued moving hundreds of thousands more dollars to his checking account and used the money to pay attorney fees, make credit card payments, and buy stock options, according to the report.
In 2017, Deutsch invested $250,000 into a real estate development project near Royal Palm Beach. Cohen allegedly told her she would receive 12% return on her investment in two years.
Deutsch has also said that she allowed Cohen to control her $2 million TD Ameritrade account, which was down to $300,000 by the time he was done with it.
Deutsch says she contacted Cohen after making the investments, but he eventually stopped taking her calls and she has not received her principal or interest. She doesn’t know if Cohen ever invested her money in the marijuana business. Investigators say the marijuana company told them they had no investors in Florida or Pennsylvania. There’s also doubt about the legitimacy of the real estate project.
Investors may have Claims Against Unlicensed Financial Adviser
Deutsch did not receive paperwork or sign anything related to the investments with Cohen. She claims Cohen gave her the impression that he was licensed as a broker or investment adviser.
Most persons who sell investment opportunities are required to register with the SEC and FINRA. According to an investigative report by the Florida Department of Financial Services and the Palm Beach County Sheriff’s Office, Cohen was not a registered investment advisor, registered dealer, or associated person.
If Deutsch had looked up Cohen, she would have seen that he was not a registered broker or investment adviser. But one thing she could not have known is that in 2017 Cohen was convicted for felony grand theft over $20,000 and sentenced to four years of probation, because the judge sealed the case.
Silver Law Group represents investors in Boca Raton and throughout the country who have lost money to unregistered financial advisors or stockbrokers. This is a growing problem as highlighted by many state regulators, FINRA and the SEC. Many recent Ponzi schemes reveal this growing problem leading to investors losing huge amounts of money. Recently, Silver Law Group has filed claims against unregistered advisors in Ponzi schemes relating to Woodbridge, Par Funding, and others all involving the sale of unregistered securities.
Investment Risk Or Fraud?
In recent years, there have been many cases of fraud related to marijuana and CBD investments. These investments frequently promise high returns and low risk and may be sold by unregistered or unlicensed individuals. The investment could be in the form of a publicly-traded stock, private placement, or other vehicle.
Investing in Marijuana companies can be risky. However, they should not be frauds. No one has the right to misrepresent an investment and take the investor’s money for their own use. Company insiders cannot use the companies coffers as their own piggy banks. If you believe that you are the victim of a marijuana stock scheme, we may be able to help.
Silver Law Group’s Investment Fraud Attorneys
If you’re the victim of investment fraud from a marijuana investment, unregistered individual, or other cause, contact us for a free consultation. Silver Law Group represents investors in securities and investment fraud cases. Our represent investors across the country to help recover their investment losses.
Our attorneys represent investors in marijuana related litigation. Most cases are handled on a contingent fee basis, which means you won’t any pay legal fees unless we are successful. Call us toll free at 800-975-4345, or use our online contact form to get in touch.